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Norwich union cut bonuses

Norwich union has become the latest insurer in the UK to cut bonuses on its profits funds and lower final payouts. While the move was not unexpected after the recent French Provident announcement there is serious risk to many investors across the UK who had seen with profits funds as their saving schemes of the future. There are now serious concerns that too many people in the UK appear to have placed all their eggs in one basket and could be seriously impacted by the change in bonus and final payout values.

Unfortunately these bonuses and final payouts are at the discretion of the insurance company involved so there is no legal recourse or action which investors can take to reclaim lost amounts. It does however highlight the need to take quality independent financial advice at all times as even the simplest of investments, i.e. with profits policies, are not always what they seem.

Now that we have seen French Provident and Norwich union step into the breach and break ranks with the rest of the sector, it would appear to be only a matter of time before others follow suit. Whether they wait until the dust has settled on the first two announcements and then try to sneak in their own reductions remains to be seen, but sooner or later the whole sector will take a step down with regards to bonuses and final payouts.

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